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Crude Oil Is Looking For A Clue To Move!

ByICN.com
Published 09/11/2012, 08:27 AM
Updated 07/09/2023, 06:31 AM

After yesterday’s indecisive trading session, the commodity is trading slightly higher from the opening as the market expects a stimulus move from the U.S. Federal Reserve Bank which would reinforce demand from the world’s largest oil consumer. Crude oil opened today’s session at $96.24 and traded between a high of $96.52 and a low of $96.07 and is expected to remain volatile in the coming period as the weakening dollar is helping suppress the downside influence from the market tension on oil, especially with eyes on Germany’s court ruling on the ESM.

We cannot pinpoint a specific direction for crude oil as many major events are due later in the week with all eyes waiting these important events. Before the FOMC announce its rate decision on Thursday investors are worried over Germany’s participation in the euro’s permanent emergency fund, as the decision is due on time on Wednesday after fears that it might be delayed.

The higher court in Germany will decide the legitimacy of the ESM tomorrow and whether the country will participate in this permanent fund, noting that Germany is the biggest contributor to the fund by 27%. Experts see that Germany might say “yes” to the fund but with some conditions.

In general, oil prices may fluctuate heavily in the coming days ahead of these major events. Nonetheless, the weakening dollar is giving crude oil strong upside momentum and helps it to edge higher despite the gloomy outlook.

The USDIX dropped sharply today retracing from yesterday’s upside movements after Friday’s collapse. The index which tracks the dollar’s movements against a basket of major currencies opened today’s session at 80.42 and dropped from this level to reach a low of 80.14.

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